Afghanistan Economic Instability: What Does It Mean for Investors?

Afghanistan Economic Instability: What Does It Mean for Investors?

Afghanistan Economic Instability and Global Crisis: What Awaits investors?

Throughout its history, Afghanistan has experienced chronic instability and conflict, destroying its economy and infrastructure and resulting in refugees. After a devastating civil war, a US-led invasion in 2001 forced out the Taliban, who established strict Islamic authority. However, the Taliban were never truly wiped out, and they continued their efforts to gain power for years. As a result, currently, Afghanistan’s neighbours scramble to respond to a changed geopolitical outlook following the Taliban’s quick return to power after two decades.

As the US military presence in Afghanistan dwindled, the Taliban made fast battlefield advances contributing to Afghanistan economic instability.

Kabul was the final city to succumb to the attack that started months ago. In February 2020, the US agreed to depart Afghanistan, and the Taliban agreed to refrain from attacking US personnel. The agreement includes not allowing al-Qaeda or other terrorists to operate government-controlled regions and national peace negotiations. However, the Taliban continued to attack Afghan security personnel and civilians in the following year, rapidly moving across the nation.

In April 2021, US President Joe Biden declared the departure of US forces in Afghanistan by September 11. It is regardless of the Afghan officials’ significant concerns about the government’s susceptibility to the Taliban. The Taliban swept into Afghanistan in under ten days, seizing territories after territories from August 6. Due to this, thousands of civilians evacuated their homes, with many settling in Kabul and others fleeing to neighbouring countries.

The Taliban

After the withdrawal of Soviet soldiers from Afghanistan in the early 1990s, the Taliban, or students in Pashto, arose in northern Pakistan. The primarily Pashtun movement begun at religious seminaries preaching a fundamentalist brand of Sunni Islam, funded by Saudi Arabia. Once in power, the Taliban promised to restore peace and security in Pashtun territories bordering Pakistan and Afghanistan. They seek to apply their strict form of Sharia or Islamic law.

Their early popularity stemmed from combating corruption, reducing lawlessness, and making the highways and areas safe for businesses to thrive. The Taliban imposed punishments such as public executions for convicted murderers and adulterers and amputations for those convicted of theft. Men needed to grow beards, and women had to wear the burka, which covered their entire bodies. The Taliban outlawed television, music, and movie viewing and the attendance of girls aged ten and up at school.

Following the assault on the World Trade Center on September 11, 2001, the Taliban became the focus of global attention. The Taliban faced accusations of providing a haven for the main suspects, Osama Bin Laden, and his al-Qaeda organization. They are also subject to committing several human rights and cultural violations. Despite international condemnation, the Taliban carried out their plan to destroy the iconic Bamiyan Buddha statues in central Afghanistan.

Afghanistan Economic Instability: What Does It Mean for Investors?

Afghanistan Economy

Afghanistan’s economy characterizes vulnerability and reliance on foreign assistance. Many are employed in low-productivity agriculture centres in a highly restricted private sector. Insecurity, political instability, deficient institutions, limited infrastructure, pervasive corruption, and demanding business environment stifle private sector expansion and diversification. In the 2020 Doing Business Survey, Afghanistan was placed 173rd out of 190 countries, which indicates pertaining Afghanistan economic instability.

Private sector credit accounts for barely 3% of GDP due to weak institutions and property rights. Lack of competitiveness contributed to a structural trade imbalance of roughly 30% of GDP-nearly exclusively supported by grant inflows. According to the World Bank, around 75% of Afghanistan’s government spending depends on grants. Opium cultivation, smuggling, and illegal mining heavily influence the illicit economy’s output, exports, and employment.

The economy’s prospects are considerably gloomy, as future financial aid is unknown. Although Afghanistan has significant mineral resources, the political situation has made it difficult to exploit them. Another long-standing issue in Afghanistan is the lack of international economic investment due to security and corruption. Despite this, Asian Development Bank expects Afghanistan’s GDP to grow by 3% in 2021 and 4% in 2022.

The Saudi Arabia of Lithium

The Afghanistan economic instability would be non-existent if proper efforts are made. the country has very large quantities of Copper, cobalt, coal, and iron ore. Oil, gas, and valuable stones are also available. Lithium, a metal used in batteries for mobile devices and electric autos, has exciting potential. As the automotive sector transitions to zero-carbon modes of transportation, the latter application will become increasingly essential.

Afghanistan has about $1 trillion worth of natural resources, according to US military scientists and geologist’s 2010 report. The value of several of those minerals increased as a result of the global transition to green energy. Kabul’s natural wealth, including fossil fuels, is worth $3 trillion, according to Afghan government follow-up analysis in 2017. According to a Pentagon report, Afghanistan is the Saudi Arabia of lithium, with lithium resources that potentially rival Bolivia.

Gold, copper, iron, lithium, and rare earth minerals take money, technical knowledge, and time to extract. According to the International Energy Agency, it takes 16 years for a mine to start producing after discovery. According to Khan, the International Monetary Fund’s central Asia director, minerals currently earn only $1 billion each year in Afghanistan. He estimates that corruption,  warlords, and the Taliban have siphoned off 30% to 40% of tiny mining projects.

Human Capital & Trade

Afghanistan is a young country, with two-thirds of the population under the age of 25. They’ve also become a reasonably educated population, with many women joining the fold as literacy rates improve. Refugees seeking help across borders created confusion and panic among its population. Thousands of people are trying to exit the country via airports all over the country

The Afghanistan economic instability is causing an uproar around the world. Financial market indices are down, and investors are waiting to see how world leaders will react. The FTSE 100 fell 0.90 per cent, while the STOXX Europe 600 fell 0.50 percent. The Dow Jones Industrial Average (DIJA) and the S&P 500 are down 0.065 percent and 0.23 percent, respectively.

Afghanistan’s export base is small and concentrated in a few markets. Carpets and rugs, as well as dried fruits, are Afghanistan’s main export goods. Pakistan, India, and Iran are the main export partners. Pakistan, China, Japan, Russia, and Iran import Afghanistan’s petroleum, machinery and equipment, food, and base metals.

Countries with Business Interest

After the Taliban virtually took control of Kabul over the weekend, the West pledged not to work with them. On the contrary, China, Russia, and Pakistan are eager to do business with the Islamist group. China, the world’s largest manufacturer of industrial goods, is fueling the worldwide demand for commodities. Beijing, the country’s largest foreign investor, is anticipated to lead in constructing efficient mining infrastructure for the country’s mineral demands.

The new Taliban authorities in Afghanistan still have a long way to go in harvesting the country’s mineral resources. The Metallurgical Corporation of China, an Asian mining behemoth, has a 30-year lease to mine copper in the Logar region. The Pakistani government maintained connections with the Taliban after supporting the group’s first takeover of Afghanistan in 1996. The New Silk Road, which China is investing in, is likely to benefit Pakistan significantly.

The United States and Europe, which rely on Chinese rare earth shipments, now have a new dilemma in dealing with the Taliban. Because of security and rule-of-law concerns, many Western investors have been unwilling to engage in natural resource tenders. Trying to talk to the Taliban has accusation risks of disregarding the Islamist group’s destabilization of the country’s young democracy. China and the Taliban’s traditional sponsors will benefit if they don’t.

Conclusion

The Taliban’s comeback could signal the start of a new dark period in Afghanistan. Uncertainty surrounds the country’s economic success and ties, particularly among countries having significant investments in Afghanistan. Roads, dams, energy transmission lines, solar panels, phone networks, and substations are vital infrastructure investment projects Afghanistan needs. It demonstrates tremendous mineral extraction potential, which is lucrative to investors and the current Afghanistan economic instability.

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U.S. Entrepreneurship Plummets: Should You Be Concerned?

U.S. Entrepreneurship Plummets: Should You Be Concerned?

Declining U.S. Entrepreneurship, What Should Americans Do?

Entrepreneurship is in a prolonged period of decline. This is particularly true for highly trained and experienced professionals who entered the workforce when the economy was propelling growth and falling behind. The number of entrepreneurs has been declining for decades and has recently begun to drop off a cliff. The number of new businesses formed in the U.S. each year has been on a downward trajectory for the past four years running, according to a new report from the Kauffman Foundation.

There is something immensely frustrating about this trend: many young people confidently enter the job market, knowing that they will find opportunities for growth once they get started. Compared with the Depression years before World War II, when unemployment reached 25 percent, today’s middle class is more resilient and can keep up with inflation and growing earnings.

Gains and Losses: Which Is More Material?

Entrepreneurship is one of the driving forces of America’s success, and it incidentally benefits its people. However, in recent decades, U.S. entrepreneurship has plummeted. Most people choose to work for these entrepreneurs instead of building their empires. Should the disappearance of U.S. entrepreneurship cause Americans to worry? Or should we let it happen? However, you may need to weigh the pros and cons, as well as its short-term and long-term effects, before drawing any conclusions.

There is no doubt that entrepreneurship brought numerous advantages to the people. There are a lot of privileges that we unconsciously savor from this activity.

Job Opportunities

Pros

Entrepreneurship has a direct correlation with job employment. It also drives rapid economic industrialization and economic growth in the U.S. economy. In addition, almost everything from our smartphones to heaters is the product of entrepreneurial spirit. Perhaps it has created market competition. However, it is the gateway to a more innovative, comprehensive, and creative world that can flourish.

Cons

On the other hand, entrepreneurship can undermine its privileges above due to its ruthless nature. This might start layoffs for companies that cannot compete in the market. Thus, entrepreneurship both creates and destroys the jobs of middle-class people. In addition, these startup companies have many regulatory and administrative burdens, such as the need for time for company registration, paperwork and red tape, etc.

This type of excessive regulation for entrepreneurs makes it difficult for them to realize their potential. This is also because rules are frequently changing, complicated and vague, making it arduous for entrepreneurs to survive in business. This survival of the fittest is not necessary. Maybe, this is happening because people do not want to burn their money. So, if you are an existing or potential startup company, will you venture into the business world?

U.S. Entrepreneurship Plummets: Should You Be Concerned?

The Genesis of U.S. Entrepreneurship

Becoming an entrepreneur is in the genes of every American. From the beginning, the United States has been a great player in the business world, deeply rooted in becoming a risk-averse innovator and accepting a new set of ideas and knowledge. The origin of U.S. entrepreneurship can be traced back to the primordial trading and bartering activities with Native Americans that even flourished in the post-American Civil War.

In the nineteenth century, it emphasizes the creation of capitalists, innovators, financiers, and businesspeople who are not limited to venturing out businesses but expanding existing businesses. It has been the secret weapon of the U.S. to prosperity, creation of job opportunities, generation of national income, advancing innovation, and upgrading business procedures.

Entrepreneurship in the United States

In the 1970s, entrepreneurs accounted for about 12% of all new jobs created in the United States. By 2000, that number had dropped to 8% and is now at an all-time low of 5%. Incomes for high-skilled workers have stagnated or declined, while those for low-skilled workers have increased. Projects by Berkeley economist Arun Sundararajan have shown that the number of startups with less than $1 million in funding has risen dramatically.

From the 1800s to the present, the innovative enthusiasm of the U.S. never fades. The U.S. has Andrew Carnegie, who founded the Carnegie Steel Company – the largest steel company in the history of the United States. The creation of the first car was also credited to U.S. entrepreneur Henry Ford – the founder of one the best manufacturers of automobiles. America’s pride Oprah Winfrey grew her media company with a global brand that attracts millions of television viewers. Moreover, the notable Bill Gates and Larry Page, who earn millions of dollars as they venture into the world of technology, also have American roots. The US is an essential player in the business world.

Start-Ups Gradually Vanishing: Numbers and Reasons

Many studies have shown that U.S. entrepreneurship is disappearing. According to data from the Brookings Institution, in a 2015 report released by the U.S. National Bureau of Economic Research (NBER), the number of business closures also exceeded the number of new startups. According to a report released by NBER, the entrepreneurial spirit in the United States has been declining for the past three years.

Historically, only 13% of companies were considered startups in the late 1980s, and this number has fallen to eight percent just in two decades. Between the 1980s and 1990s, the rate decreased, but in the 20th century, new businesses provided fewer opportunities than in the first decades.

Regulatory Statutes

The contributors to this significant decrease in entrepreneurial activities in the U.S. are primarily anchored on regulatory statutes. Dearie and Geduldig revealed in their book “Where the Jobs Are: Entrepreneurship and the Soul of the American Economy” that some of the reasons for the decline in entrepreneurial activity in the United States are:

  • Lack of startup capital
  • Difficulties with stricter government policy
  • Regulations that need to be overhauled to attract more entrepreneurs

Others argue that the rivalry has become so fierce that it is difficult for an entrepreneur to start and survive. Furthermore, economies of scale make it difficult for small enterprises to offer competitive prices while remaining in business.

U.S. Entrepreneurship Plummets: Should You Be Concerned?

Student Debt

From a student’s perspective, another factor that hinders students’ entrepreneurial ability is student debt. It is estimated that student borrowing soared to 1.3 trillion U.S. dollars, equivalent to more than 5% of the overall U.S. Treasury bonds. This situation worsens year after year, resulting from students’ debt of about $26,000 in 2013 and more than $35,000 who graduated in 2016. The students want to start, but they have no financial leeway.

Today’s personal and economic challenges require a closer look at the business perspectives held by many people in the United States who have been hampered for some reason. Stakeholders must create and support new entrepreneurs to start businesses. These efforts will promote economic growth and help expand profitable opportunities for all workers across the United States.

Flourishing New Innovators

Who can help our future entrepreneurs to be successful in business? If necessary, how and what strategies and policies should the government develop to support business activities in the United States flourish as before? These are some questions that need to be answered and given a platform to create new personalities, which will provide new opportunities to tell a story of success.

Enhancing Entrepreneurship for the 21st Century Act

On July 21, Rep. French Hill outlined the relevance of promoting entrepreneurship and procedures to offset the decline in U.S. entrepreneurship, together with Representatives Bill Foster, Steve Chabot, Stephanie Murphy, David Schweikert, and Marc Veasey. They relaunched the bipartisan Congressional Entrepreneurship Caucus and reintroduced HR1345, the Enhancing Entrepreneurship for the 21st Century Act. This restart is aimed at reversing the plight facing Americans across the United States.

The Caucus hopes to integrate the various knowledge, ideas, and ways of thinking of the organizations, including the American Entrepreneurship Center, Engine, Kauffman Foundation, and Entrepreneurship with American entrepreneurs. Identifying and removing obstacles will be the primary goal of this move on behalf of Hill and his company.

Another point of view from Salgado pointed out that borrowing costs can affect the trend of business activities. Compared to entrepreneurs who have established brands, this subsidy is of great importance for young small entrepreneurs. Salgado pointed out that fixed subsidies cannot eliminate the effects of technological changes that affect the economy, which has led to a proportional decrease in the participation of entrepreneurs and the business entry rate.

Conclusion

For the mindset of every potential entrepreneur to flourish, financial assistance is not the only way to solve the problem. Every American needs to increase the value of risk appetite. From Edison to Gates to Page, they bet on life and uncertainty. They have accepted risks and possibilities at every step, regardless of the future. Furthermore, as the adage goes in the business and financial world, the larger the risk, the higher the payout. Without sacrifice, there can be no wealth.

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Shortage of Semiconductors Sends Panic Signals Worldwide

Shortage of Semiconductors Sends Panic Signals Worldwide

Knowing Different Reasons for the Shortage of Semiconductors

The shortage of semiconductors has led to the reliance of the modern world on minuscule components. These building blocks do allow electronic devices to process their data. But the question is, why is all this happening, and what further steps can be taken to prevent such an issue?

Is There Really a Shortage of Semiconductors?

According to news reports, a severe shortage of semiconductors has been creating panic among automobile makers and electronic firms worldwide. Experts say the excessive spending by people on electronic items during the pandemic and the huge demand is among the top reasons for this shortage. Other reasons include the closure of factories during the pandemic and Chinese top tech firm Huawei hoarding semiconductors as a result of the US ban.

Tim Cook, the Apple CEO, made a statement saying that the shortage will affect the production of iPhones and iPads. As per analysts, companies will have to bear the effects of the shortage for at least a year. Meanwhile, since manufacturers are hiking prices, consumers can expect to pay more for electronic items and automobiles.

How It Began

The start of the COVID-19 pandemic in the early months of 2020 was a disaster and a shock to the world. This was a time when there was a spree going on for electrical items. A chain of events and panic attacks led to a minor bump in consumer demand. There was an unexpected rise in the demand for chip-heavy gadgets. The companies building these devices sent out a wave of semiconductors orders, which rippled with the supply chain.

People began panicking and went on to buy extra monitors, televisions, games, laptops, etc. First, people wanted to beat the lockdown boredom, and second, they knew that they would need the essential electronic items to continue working at home. This overwhelmed the chip factories that manufactured the globe’s computer chips virtually.

The bleeding-edge chips empowered gaming consoles, smartphones, household appliances or 5g modems, etc. As per the estimates of Goldman Sachs, there were at least 169 industries that had faced disruptions due to the shortage of semiconductors, which potentially shaved 1% of the US GDP in the year 2021.

Situation During the Pandemic

The pre-pandemic threat did pose enormous challenges for the semiconductor industry, but the situation during the pandemic got worse. When plants started to re-open, the producers of electronic goods continued to place orders in huge numbers. This situation led to an ever-increasing backlog for semiconductor chips. Temporary closure of factories due to the lockdown restrictions also put more pressure on the supplies.

Although the Pandemic has been one of the main reasons for the shortage of semiconductors, it wasn’t the only reason. It was in February when there was a storm in Texas and affected several production plants. In March, there was an obnoxious fire that ripped through the Japanese factory. Adding to the fuel, even US-China tensions have little to contribute to this situation. In August 2020, the US went on to ban the companies whose chips had been using US technology from selling to Huawei, the Chinese giant, over the espionage allegations. Huawei tried to outsmart by collecting semiconductors much ahead of this sanction coming into effect. Unfortunately, other companies started following the same, which finally led to further straining of the supplies.

Shortage of Semiconductors Sends Panic Signals Worldwide

Threat to Other Industries

The same forces that snarled the supply chain for semiconductors also led to a shortage of various things globally. Currently, one of the most visible victims has been the automobile industry, as many car brands were forced to slow down the output in recent months.

As the car makers slashed their production during the early pandemic days, the chip suppliers, in return, turned to their clients from various other sectors, such as electronic goods, which were pretty much in high demand during the pandemic. Car brands, such as Volvo and Volkswagen, screamed hard to hold the semiconductor suppliers, especially when the sales started to revive again.

Compared to the automobile players, the smartphone industry was a little on a safer side, as many companies had stocked up the chips, but now these companies have also started to suffer due to the shortage. Apple is one of the prominent ones, which did get hit by the production, but the smaller players are the ones that are likely to get massively affected. In addition, games consoles, such as Xbox and PlayStation, have also been victims of a shorter supply.

Government’s Action

Governments across the globe have been trying to push the capacity of chip-making so that industries would not have to suffer to the extent they are now. In May 2021, the South Korean government announced a massive investment of $451 billion in a bid and a hope to become a giant in the semiconductor industry. The US Senate last month voted in subsidiaries worth $52 billion for chip plants known as fabs.

Lately, the European Union is also on the go, seeking to double the shares of the capacity of the global chip manufacturing industry to 20% by the end of 2030. But the problem is that these chip factories cannot open overnight, especially those that make semiconductor chips. This is because, especially for the semiconductor chips, there is quite a delicate process involved, which presses the layers of chemicals into silicons.

Building newer capacities does take considerable time. For a new fab to come into play, it would roughly take about 2.5+ years. Undoubtedly, it is excellent that expansions are taking place now, but whatever progress is taking place now, we will reap its benefits post-2023 only. Until then, for a year and a half, we will have to live with the shortage of semiconductors. Some long-term factors also meant there was a global demand, which means there was hyper-growth. This indicates that plenty of companies were storing their essential data in the cloud, requiring the need to build more data centres.

In the industry across, there is a unanimous acknowledgement that the shortage of semiconductors will last up to one year. However, the continuous squeeze will end up in higher prices for the consumers. Companies will have no choice, and to curb the demand, they will have to increase the price by a huge margin.

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Is Social Commerce the Future of Online Business? 

Is Social Commerce the Future of Online Business? 

How Social Commerce Will Reform Shopping Habits

The online world, which has given rise to social commerce, has drastically changed the way buyers had been shopping in traditional times. Social commerce sells the products directly on the social media platforms, such as Instagram/Facebook shops. Through these platforms, businesses can easily host product pages and manage sales.

The primary advantage of social commerce has been to help customers discover various brands, browse through and make purchases without leaving the app time and again.

Social Commerce is All Set to Boom

As per the latest reports, the social commerce industry is poised to touch $50 billion within the next two years. Big social media giants like Facebook, Snap Inc, and Twitter are all spending on shopping features with a view to increasing their revenues. This is excellent news for retailers who are reeling under the impact of the pandemic and subsequent restrictions and have been suffering losses, being unable to open their physical establishments.

Even if social commerce is happening on a small scale, experts believe it will grow exponentially in the coming years. Top social media platforms are banking on the data they receive from the users’ browsing and shopping habits and use them for their targeted marketing campaigns. Sources say that Facebook is currently the leader in generating maximum sales on their site, with Instagram in second place. Top analysts say that even if the pandemic situation came to normal, people would prefer to continue shopping online.

How Social Commerce Revolves Around Our Lives

Let us take an everyday example, which we are sure you must have witnessed plenty of times. When browsing through Instagram, an advertisement about your favourite dress comes your way, which is on sale. So, without wasting much time pondering, you hit the ‘Buy’ button on the Instagram advertisement.

With just a click, a purchase gets made without you having to visit the bank or the merchant’s site. After you make the purchase, you go back to scrolling on Instagram or other social media websites, and this cycle continues. This scenario is an excellent opportunity for the buyers and the sellers who are not leaving a single stone unturned in reaping the benefits out of social commerce.

The Advent of Social Commerce

It had all started with the introduction of Facebook’s Shops feature in 2020 Later on, other social media websites, such as Instagram, also started offering this feature to their users.

These online marketplaces have been a huge boon to marketers in helping them create personalized posts to sell their products. These moves have especially helped plenty of small businesses function during tough times of the COVID-19 pandemic.

eCommerce Vs. Social Commerce

Undoubtedly, people do have an idea about eCommerce or social commerce, but they are not very sure of the core relevance and mix the two. eCommerce is the word that refers to shopping through either a dedicated website or an app. On the other hand, social commerce is how customers help make the right purchasing choices within their circle of using social media. So both social commerce and eCommerce are related terms but are not the same. In the case of social commerce, the whole experience of shopping right from the discovery of the product, research, and finally buying the product takes place on the social media platform itself.

Is Social Commerce the Future of Online Business? 

Target Audience

When we talk about the target audience of social commerce, the list is never-ending, including influencers, millennials, Gen Z, social media users, etc. As per a report stated by Instagram, 70% of online buyers first glance at Instagram to check out and discover the brand and the products. The increased popularity of social media stores and social commerce signifies that today’s platforms are quite concerned about evolving themselves as per the marketers’ needs.

Instead of restricting themselves to being a product gallery, which does draw attention and redirects these customers to the seller’s website, social media platforms now want to have a larger share by transforming into a marketplace. In the current times, social commerce providers have been equipped with hosting and managing the customers’ shopping experience on their dedicated platforms. Therefore, it is not necessary for customers to leave the website or visit the seller’s apps or website or other eCommerce websites, such as Amazon, to shop. This exponentially helps in saving the time of the customers.

With the pandemic, people have been forced to be locked up in their homes for months and follow the social distancing norms. The social media platforms have helped users stay connected to their loved ones and pass their excess time by being active on these platforms. Online shopping has significantly grown now, as people have got used to ordering things with a click of a button. Customers are over satisfied with the integration of social media, the discovery of products, payments, and shopping experiences all coming together under one platform. As per the insights, by the end of 2027, the global social commerce market will be seen expanding by 32%.

Providing Customers with an Enhanced & New Experience

Today, globally, the social commerce players might seem to be different from each other, but there is some monopoly. Social media platforms cover almost one-third to half of all the eCommerce transactions taking place around the globe. In China, the usage of Little Red Book and WeChat has been very successful. There are higher chances of social commerce taking over in the US and APAC region than in any other region globally.

The Big Players in the Arena

When we talk about the marquee players, then Instagram and Facebook are the most prominent names.

Facebook

Facebook shops are quite customizable. The Facebook for Business page has been helping marketers to connect with the existing and potential customers, where businesses can share news about discounts, new product launches, availability of products, or contests.

Instagram

Instagram shops allow the users to buy the featured products in the stories and posts from anywhere in the app. There are Instagram shopping tags, which would enable businesses to get their products on the posts or stories. Every product receives a detailed page, which features media, pricing, and a detailed description.

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Airbus Confirms A350 Freighter Challenging Boeing Cargo Dominance

Airbus Confirms A350 Freighter Challenging Boeing Cargo Dominance

Airbus Announces A350 Freighter, Plans Debut in 2025

Airbus has revealed its plans to design and develop an A350 freighter and mount a challenge to Boeing’s dominance in the cargo market. The news came on Jul 29, 2021 when Airbus presented its half-year results. Likewise, the Toulouse-based manufacturer has already got the green light from the board of directors on the design and development plans. The entry into service is planned for 2025. Furthermore, the a350 freighter, based on the current passenger version of Airbus A350-1000, will have a payload capacity of more than 90 tonnes.

Airbus CEO Guillaume Faury reiterated the need for Airbus to extend its presence in the cargo market. “ I do not like the idea of remaining weak in that segment in the future. I think we have the right product to be able to be more aggressive in that market”, he spoke during Airbus’s first-half result presentation. Likewise, he said that the experience gained during the design and development of the recent Beluga XL, based on an A330-200, will be a great advantage.

Strong First Half Performance

Despite the airlines industry taking a severe hit due to the coronavirus pandemic, Airbus showed strong performance in the first half of 2021. From January to June, it delivered  297 commercial aircraft to customers worldwide and generated about USD 2.6 billion of profit. On the other hand, its arch-rivals Boeing only managed to deliver 156 aircraft.  Similarly, revenues went up by 30% year on year to 29.2 billion US Dollars. The aerospace giant aims to rake up profits of up to 4.75 billion US dollars, with 600 aircraft deliveries, by the end of the year.

Airbus in the Cargo Market

The A350 freighter is a major undertaking by Airbus, which follows upon its successful portfolio of freighters. As of now, Airbus features five freighters, whose basic description is given below.

Airbus A321P2F

Airbus A321P2F is the world’s first single-aisle freighter with Fly-By-Wire technology. With a length of 44.51 m and a wingspan of 35.8m, this aircraft can carry a max payload of 28 tonnes and fly a maximum range of 3800 kilometres. Similarly, its low fuel burn and emissions make it an attractive choice in the cargo market. Over the next 20 years, Airbus hopes to receive a demand of 950 aircraft in the small freighter segment.

Airbus A330-200F

Airbus A330-200F is Airbus’s new-generation freighter that comes from its mid-size A330 family. With less noise and emissions, it is one of the most attractive options for a mid-size cargo. Featuring a length of 58.8m and a wingspan of 60.30m, this aircraft can carry a max payload of about 70 tonnes. Similarly, it can fly a maximum range of up to 7400 kilometres. According to the company website, there are more than 1000 orders for this technologically advanced aircraft, whereas more than 650 are currently in service.

Airbus A330P2F

The Airbus A330P2F (Passenger to Freighter) program offers a conversion opportunity for A330 aircraft that have successfully completed their useful operational service. Both A330-200 and A330-300 models are suitable for this conversion and have distinct features. The A330-300P2F has a longer fuselage and is typically suitable for express carriers and integrators, whereas the A330-200 P2F is suitable for high-density freight and longer ranges. The A330 has been one of Airbus’s most successful models, with over 1300 deliveries and 1600 standing orders.

Airbus BelugaST

Airbus BelugaST is Airbus’s unique way of transporting oversized cargo. It offers one of the most voluminous cargo holds in both civilian or military space. For Airbus, this aircraft is highly important for keeping up with the production and assembly network.  With an overall length of 56.16m and a wingspan of 44.84 m, this aircraft can carry a max payload of about 47 tonnes to a range of about 1650 km.

Airbus BelugaXL

Airbus BelugaXL is the new line of super transporters from Airbus that are set to replace the BelugaSTs. Launched in 2014, this series of aircraft was set to ramp up the production of the A350. The maiden flight came in 2018, which led to its certification in November 2019, and entry into service came in January of 2020.

This gigantic aircraft features an overall length of 63.1 m and a wingspan of 60.3m. With a maximum payload capacity of 51 tonnes, this aircraft can fly to a maximum range of about 4000 kilometres. Compared to the BelugaST, this aircraft can provide 30% extra transport capacity.

Challenging Boeing’s Dominance

Boeing in the Driver’s Seat

As of now, Boeing maintains strong control in the cargo market. More than 760 freighter aircraft have already been ordered, and 732 have been delivered. Boeing 747, the queen of the skies, is also the queen of the cargo market. Since its debut in 1966, there have been 390 deliveries, and 138 orders have come for the new 747-8 variant. However, Boeing looks to push the 777 as the star of its freighter line after the 747-8 program comes to a close next year. Boeing 777-200 LRF has already generated more than 250 orders since its launch in 2005 whereas there have been 233 orders for the Boeing 767F since 1993. However, things could change for these two aircraft as new regulations are set to come into play in this decade.

Airbus Failed to Take Off

The A350 freighter comes as a relief for Airbus’s freighter program which has not really taken off for the last few years. Barring its passenger to freighter (P2F) conversion program, it has not sold a newly built cargo aircraft for the last six years. The A330-200F cannot compete with the 777 in terms of size. Similarly, the A380, which was planned for cargo purposes, never really took off and the family is finally retiring.

ICAO Standards Means Advantage Airbus

ICAO is set to enforce CO2 standards for aircraft emissions which will take effect starting from 2027. Boeing’s top players 767-300 ERF and 777-200 LRF do not meet the ICAO standards. The 737 MAX disaster means Boeing will be careful with tweaking its existing designs. On the other hand, the A350 freighter seems to tick all the boxes putting Airbus at a major advantage. With its new lightweight design, the aerospace giant boasts a 25% decrease in operating costs, fuel burn, and CO2 emissions.

Know What’s Happening in the  Business World with Top World Business

In this blog, we came across the news of Airbus announcing its new A350 freighter which is set to enter into service in 2025. Similarly, we also took a look at Airbus’s 1st half performance for 2021. Likewise, we learned about some of the distinct features of aircraft inside Airbus’s freighter portfolio. Furthermore, we understood the state of Boeing’s dominance in the market and why Airbus could not make a strong presence. Finally, we saw how things could change as new emissions regulations come into play after the mid of this decade.

Top World Business is a one-stop place for all the business-related news from every corner of the globe. Our aim is to keep you updated on recent and future business news and trends so you can use them to your advantage. Contact us if you have any further queries.

Pandemic To Cause Unemployment For Over 200 Million By 2022

Pandemic To Cause Unemployment For Over 200 Million By 2022

Pandemic to Cause Unemployment to Millions of People – A Huge Economic Fall Down

The whole wave of COVID-19 pandemic for the last 1.5 years has caused terror in each of our lives. There has been an immense negative aspect of the whole pandemic, where lives have ended, people have fallen ill, etc. But more than anything, there has been a significant impact on unemployment, and as per reports, it has been expected for the pandemic to cause unemployment. There were tons of individuals who were laid off from their job. Professionals were also asked to leave.

Recovery from the COVID-19 is not just about health anymore. The ‘Health’ aspect is getting in control after a massive outbreak of 1.5 years of rising COVID-19 cases, but now the bigger concern is the ‘Unemployment’. The very serious damage to societies and economies has taken a toll on the economy.

However, the impact does not put a full stop here, as it has just begun. As per studies, it has been claimed that almost 200 million+ people will be unemployed by the end of 2022.

Impact of the Pandemic on Economies Worldwide

The pandemic has brought disruption to the economies of most countries. The United Nations Labour experts state that the crisis has hit women and youth labourers the most. In the US, it has made an impact on all the economic sectors, and as per reports, in April 2020, the unemployment rate reached a new high of 14.8%. The worst-hit regions in the first half of 2021 are Europe, Latin America, Central Asia, and the Caribbean. The working hour losses have been in the range of six to eight per cent in these regions.

The pandemic’s impact seems to have hit women more than men, with the reports showing an employment fall of 5% in 2020. The main reason for this was the increase in women’s domestic responsibilities everywhere. Youth employment fell by 8.7%, especially in middle-income countries. Experts fear that this impact on young people could remain for years. The pandemic also led to disruption to billions of the world’s informal sector workers.

Unemployment at Its Peak in the Coming Months

As per the UN Labour expert recently, the economic crisis which has been caused due to the pandemic is expected to significantly impact the unemployment levels in the coming months. Amongst the whole lot, the women and young workers will be hit the most. Although the world has started emerging and will become a better place from the health crises it went through in these years, the five years of eradicating poverty will all be washed away.

The impact of unemployment has already started to get reflected in many parts of the world. Some of the worst-hit parts have been Europe, Central Asia, Latin America, Caribbean. These are mostly the areas that have been prominent victims of the uneven recovery. In Asia, the cases have gone down, but still, the number is quite high to allow everything to come back to normal.

These areas have seen the estimate of the loss of the working hours exceed as high as 8% in the first quarter and 6% in the second quarter of 2021.

Roles of Women and Youth Questioned

Women have been and will be the biggest victims of the problem of pandemics to cause unemployment.

There has been a 5% fall in employment amongst women as compared to 3.9% in men. The labour market has a lot to contribute to it, as many women had to drop off from the labour market due to the increasing COVID cases.

Apart from women, youth employment has also gone through its share of struggles. The segment of youth has been impacted negatively by the whole economic downturn. The fall in the employment percentage was 8.7 for the youth compared to 3.7 % for the adults, which is a massive difference.

Amongst all, one of the most pronounced falls has been for the countries with middle-income groups. These consequences of the delays and the whole distribution to the labour market leading to losing jobs could last for years.

Pandemic To Cause Unemployment For Over 200 Million By 2022

Shift from ‘Poor’ to ‘Extremely Poor’

The disruption caused by the pandemic has also led to some of the catastrophic consequences for the workers belonging to the informal sector, which constitute two billion approximately.

In comparison with 2019, in today’s time, 108 million workers across the globe additionally now come under the category of ‘Extremely Poor’ who were initially under the ‘Poor’ category. This means that the families earn less than $3.20 per person per day, making them fall way below the poverty line.

No doubt, there have been some signs of recovery with the whole campaign of vaccines, but this recovery is very uneven and fragile. In 2019, the global unemployment was 187 million, but as per the ILO experts, by the end of 2022, it will cross 205 million.

The Gap in the Jobs

There is a significant rise in the job gap of 75 million in the first half of 2021 itself. However, this is most likely to fall to 23 million by the end of 2022, keeping in mind the current circumstances and assuming that the pandemic will subside.

The drop in the working hours, which also considers the job gap, and the individuals who are working for fewer hours, amount to approximately 100 million full-time jobs in 2021, and this figure is estimated to be 26 million by 2022.

There is a shortfall in working hours and employment, which is now at the top of the high pre-crisis employment levels, poor working conditions, and underutilization of the labour.

Conclusion

There is a dire need to take deliberate efforts to accelerate creating jobs and provide support to the vulnerable individuals of society to sustain these tough times.

The lingering effects of the worst-hit pandemic could stay in the economy for decades if timely actions are not taken. These effects could range from loss of human life, inequality to higher poverty. The ILO experts feel that the world requires a well-strategized and coordinated plan based on human-centric policies, which is backed up by proper funding. By utilising these 4 principles such as promotion of economic growth and creation of productive employment, supporting the household incomes and the transitions of the labour market, strengthening of the institutional foundations, usage of the social dialogues to develop strategies that are human-centric.

Top World Business leaves no stone unturned in providing the most robust and fresh news pieces. So keep yourself updated with the latest business news and how things can even impact your life. Keep reading the space for exciting headlines.

Sam’s Club Pilots Their New Scan & Ship App Feature

Sam’s Club Pilots Their New Scan & Ship App Feature

Sam’s Club Adds the New Scan & Ship App Feature in Their Sam’s Club App

Technology plays a huge role in businesses from any sector. People are present offline and online, which means that companies need to be accessible on both platforms. Sam’s Club recently launched its new Scan & Ship app feature to make your shopping experience more convenient.

Sam’s Club Employs Technology on Its Business

Sam’s Club, founded by Sam Walton, began in 1983 when they opened the first Sam’s Club in Midwest City, Okla. Since Sam Walton also founded Walmart, Sam’s Club became a division of it. Sam’s Club is a membership warehouse where you can shop various products for your home. Today, there are almost 600 branches of Sam’s Clubs across the U.S and Puerto Rico.

The club’s President and CEO, Kathryn McLay, approved the use of technology to improve the customer experience. In an interview with CNBC, Kathryn McLay said they want to provide convenience and safety to their members, especially during this pandemic.

The company’s technology is not limited to its customers. They also have app-based tools for their employees, such as the voice-enabled service named Ask Sam. Ask Sam helps employees locate items and answer customers’ inquiries. The company recently launched the new Scan & Ship app feature, which you will know more about in the next part.

Sam’s Club Pilots Scan & Ship

The New Scan & Ship app feature is integrated into the club’s Scan & Go feature in the Sam’s Club App. The Scan & Ship works similarly with Scan & Go. It enables customers to have more control over their shopping experience.

With Scan & Ship, shoppers can scan the products and have them delivered to their doorstep. What’s nice about buying furniture from Sam’s Club is that you can choose sizes and colours that are not available in the store. Once you purchase pieces of furniture, they will deliver them to you, usually within three to five business days.

The new Scan & Ship app feature is not yet applicable for all branches of the Sam’s Club. The pilot will start at three locations: a club in Murrieta, California, McKinney, Texas, and the Sam’s Club Now in Dallas.

Sam’s Club Pilots Their New Scan & Ship App Feature

How the Store’s Scan & Go and Scan & Ship Helps Shoppers

According to the chief technology officer of Sam’s Club, Vinod Bidarkoppa, Scan & Go brought success to the company. The Scan & Go enables shoppers to scan the product barcode and pay through the app afterwards. After completing the payment, they’ll present the digital receipt before going out of the store.

The new Scan & Ship app feature provides benefits for the company and customers. Contactless shopping and transactions have been the focus of many businesses during this pandemic. As mentioned earlier, customers can scan the product when shopping at Sam’s Club. Another significant feature is that customers can also use their smartphones to pay and use virtual shopping carts.

Significance of Technology in Retail

Technology is changing the world of business. It promotes efficiency, which allows both companies and consumers to save time, money, and energy. It also provides easier access to products and services.

There are trends in the way the retail sector utilizes technology. Here are some of the primary reasons why companies use technology:

  • It enhances the customer experience.
  • It can analyze consumer behaviour and trends.
  • It can attract customers.
  • It makes their operations efficient and flexible.
  • It prevents crime.
  • It helps in managing the stock flow.

There are more reasons why businesses use technology. For the retail sector, which includes companies like Sam’s Club, technology is essential in ensuring a smooth shopping experience and better customer service.

Conclusion

Sam’s Club’s strategy on using technology has provided them significant benefits in the past. With the new Scan & Ship app feature, the company is another step closer to making its operations as efficient and safe as possible. Contactless shopping and transactions will not likely die after the pandemic. It will change the way we shop, and we might use it for a long time.

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CFOs See Hyperinflation as a Threat to Businesses

CFOs See Hyperinflation as a Threat to Businesses

Hyperinflation as a Threat – the Biggest Concerns for the CFOs

With the pandemic taking over the business world, CFOs were forced to move out of their comfort zone and leave no stone unturned in helping their business come out of the mess. Just when things were not steady, there is an all-new peril to keep an eye on their profits as many see hyperinflation as a threat. Months of fiscal and monetary stimulus have pushed up the expectations of the households for inflation in the current months.

There have been plenty of public surveys, and the results have shown a dramatic increase in inflation, and nothing of this sort has been seen in the past three decades.

Are Prices on the Rise Everywhere?

The fear of hyperinflation has been making the headlines in recent months. Economists fear that the vast amount of funds put in stimulus programs can send the prices soaring beyond control. In China, producer prices shot up by more than 4% in March 2021, which was more than 1.7% in the previous month. And in the US, producer prices increased by 1% more than the earlier month. Consumer prices in the US climbed by 0.6 % in March, mainly due to the rise in petrol prices.

Economists are debating whether the trillion-dollar coronavirus relief aid is causing an overheating of the economy. Food prices are on the increase everywhere in the world. You can observe this from the rise in the United Nations Food and Agricultural Organization Food Price Index that monitors changes in prices of globally traded food commodities. In Nigeria, food prices rose by more than 20%, causing a surge in inflation. Food in Lebanon climbed by almost five times compared to 2019 after the pandemic struck. Presently, Venezuela is experiencing a hyperinflation-like situation, with its inflation rate reaching 2.665.

Intricate Details About Hyperinflation as a Threat

Controlling hyperinflation as a threat remains an exception because of the monetary doubters mounting throughout the most recent 40 years.  An intensely obligated economy with obligation/gross domestic product proportions above 100%. The decrease in trade proceeds because of a frail worldwide monetary climate. Let’s take a look at hyperinflation as a threat to business.

North America-based CFOs communicated insignificant trust in the Central Bank’s capacity to control inflation, CNBC’s Q2 Worldwide CFO Board overview, delivered Monday, found. In any case, they hold a hopeful perspective on the near-term future for stock qualities.

As they explored developing information expenses and pay expansion, 41 worldwide CFOs disclosed to CNBC that value climbs may be required if swelling patterns proceed.

Take of U.S Based CFO’s in the Situation

CFOs in the U.S. have considered this as a significant threat. Coronavirus, online protection, and buyer interest as the greatest danger to organisations, as indicated by a CNBC Worldwide CFO Board review for the second quarter of 2021. Hyperinflation as a threat causes consumers and businesses to need more money to buy products due to higher prices.

Many individuals were surveyed between June 1 to 16 in 2021. The respondents address probably the biggest privately-owned businesses across the globe, with a faltering $5 trillion in market esteem among them.

The respondents were particularly disquieted concerning wage inflation and a rise in trade goods costs.

CFOs See Hyperinflation as a Threat to Businesses

Fear About Hyperinflation In the Corporate World

While fear of hyperinflation as a threat has died down, it was at its peak when there were inadequate jobs in the previous month.

While US-based CFO’s were doubtful of the Government Reserve’s capacity to manage to swell, no US-based corporate chief said they were “very confident” or “somewhat confident” inside the focal bank’s capacity to direct expansion. Around thirty-eight percent CFOs were “only a touch confident,” and forty-seven percent were the same as they were “not in any respect confident.”

The financial institution still maintains that this inflation trend is passing. Whereas, the non-public consumption expenditure (PCE) price index has inflated three times. Four percent YoY, monthly trends show that the rise is commencing to taper off.

Experts predict inflation to hit somewhere within the range of 3-4 p.c over ensuing years, at the same time as some believe that the Federal Reserve System can increase interest rates several times going into 2022. However, the Federal Reserve System is unlikely to tug the plug anytime ahead of time.

“We won’t raise loan costs preemptively, and we foresee work is essentially excessively high because we tend to be concerned about the possible beginning of an expansion. Instead, we will watch for actual proof of actual inflation or alternative imbalances,“ Jerome Powell, Chair of the Federal Reserve System.

Wage Pressures in Labor Market

Throughout the following half-year, the biggest gathering of U.S. CFOs (57%) anticipates that labour costs should increase the most, with the cost of crude materials increasing by 38%. Cost of work figures in the U.S. far surpasses the expense assumptions in different districts. In the EMA district, 72% of CFOs anticipate that raw materials would get expensive. In the Asia Pacific, the figures are nearer (44% referring to crude materials as the most significant wellspring of cost increment; 33% referring to work), yet materials are seen as the bigger wellspring of value concern.

“I can’t remember one other time where swelling has been a high danger factor among our individuals as it is now,” said Jack McCullough, president, CFO Administration Board.

Among the CFOs with whom he is in touch, wage pressures are the most significant wellspring of concern, and CFOs anticipate that that should stay through the year’s end.

Conclusion

The CFO perspective on the Fed may eventually have more to do with confidence in controlling their predetermination than alarm over a Took care of strategy botch.

“CFOs have more confidence in their capacity to react to expansion than they do in the Fed’s capacity to control it,” McCullough said.

Experts have been expecting the inflation rate to hit in a range of between 3-4% over the next coming year. There are a few experts who believe that there will be an increase of interest by the Federal Reserve a couple of times when going to 2022. But the Federal Reserve will not be pulling the plug down in the coming months. Instead, the Federal Reserve will be waiting for the actual evidence of imbalances such as inflation and then take action.

To get more information about what is happening across the world, especially in the business world, you can refer to Top World Business. Watch this space for the latest business news, which will help you be aware of what is happening around you in the best and the fastest way possible.

Mastercard Partners With Verizon to Promote 5G Contactless Payments

Mastercard Partners With Verizon to Promote 5G Contactless Payments

Mastercard Partners With Verizon to Promote 5G Contactless Payments for Consumers and Businesses

On July 13, 2021, Mastercard and Verizon announced their partnership on 5G contactless payments for consumers and small- and medium-sized enterprises. The collaboration aims to enable small and medium enterprises to use smartphones for payments, facilitating touchless and contactless retail. Innovative strategies and actions are expected within the partnership by the year 2023.

With the Mastercard and Verizon partnership focusing on the 5G contactless payment, these fintech giants aim to digitise and disrupt global consumer spending at retailers and merchants. This 5G project will be conducted by teams from Mastercard and Verizon in the Mastercards’ New York Tech Hub.

The 5G Contactless Payment

Due to the COVID-19 pandemic and rising health and safety concerns, physical interactions and close contact pose a risk to a person’s well-being. With this, physical money from our pockets and wallets are limited down from contact as we see money as a dirty currency passing down through different hands in society. The Centers for Disease Control and Prevention (CDC) has already recommended corporations to use touchless payment methods whenever possible.

According to a study conducted in the United States, 55% of consumers are concerned about handling physical money or cash, including chip-and-pin cards machines or even Automated Teller Machines (ATMs) are unhygienic. Instead, most consumers now prefer contactless payment options using smartwatches, smartphones, and contactless debit and credit cards to prevent contamination or spread of the COVID-19 virus.

The partnership between the aforementioned fintech giants greatly innovated the future payment and commerce in the economy, such as the 5G contactless payment. Through this partnership, using 5G connectivity and the power of the Mastercard network, the touchless payment may revolutionize the fintech industry with immersive retail technology and digital capabilities.

The Future of Contactless Payment

The Mastercard-Verizon partnership is just a start in the aforementioned fintech revolutionary trend; perhaps these two corporations might have sparked a new reforming industry. Preference of customers in contactless payments will overtake physical cash and traditional credit cards within a couple of years.

Contactless payment is not entirely cheap for retailers, regardless of its size, in making investments. In exchange, this method will significantly help retailers in reducing transaction time, increasing revenue and shortening counter ques. In short, more productive than ever. A recent study reports that 27% of small business survey respondents have seen increased customers using their mobile phones or contactless cards to pay.

In the future of contactless payment methods, mobile and online wallets might replace physical wallets within consumers’ pockets. The adoption of proximity mobile payments has been sluggish in the United States compared to mobile-first regions like China. In 2019, 81.1% of smartphone users in China used mobile payments, while in the U.S., it was only 29%. This is expected to change rapidly. According to a study conducted by RTi Research, it was reported that 30% of consumers used touchless payment methods for the first time during the pandemic.

Mastercard Partners With Verizon to Promote 5G Contactless Payments

The Vision of Mastercard-Verizon Partnership

The partnership between Mastercard and Verizon has a long journey to go in the fintech industry, and the 5G contactless payment is just a start. The partnership has a lot to unveil to its consumers and patronizers, along with its vision of working closely in unlocking the internet of things or IoT sensor connectivity. This is a promising innovative technology that empowers the fintech, payments and banking industries, and commerce experience.

Along with enabling smartphones or connected devices to accept payment with the Verizon 5G seamlessly, this touchless retail shopping experience will be integrated within Mastercard’s retail technology solutions in reducing hardware requirements and faster deployments.

The partnership envisions creating new possible ways of consuming physical and digital goods. The collaboration will create a digitally motivated network in inserting innovative and tech-revolutionary solutions in a consumer’s shopping experiences such as in Amazon, etc. The partnership aims in helping small and medium enterprises with their readiness in the business arena, giving best practices, greater efficiencies and effectiveness in their online operations.

Lastly, the partnership aims to enhance the billing payment experience for its customers and patronizers. A tap of the Mastercard’s privileges can generate a network enabling enhanced and immediate established communication between its consumers and their billers. This allows it to streamline bills paid through digital banking channels, digitize paper bills and deliver a mobile-first solution, reducing costs and enhancing the payment experience for Verizon customers.

Takeaway

The emerging technology in the 21st century sparks a revolution in the tech industry by transitioning into modern devices. 5G connectivity and contactless payment methods illustrate how the creative and innovative minds of people may contribute to the advancement of our society. This would reshape the global economy and transactions as we face modernization.

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Space Tourism Takes Off With Virgin Galactic’s Milestone Flight

Space Tourism Takes Off With Virgin Galactic’s Milestone Flight

Virgin Galactic’s Milestone Flight Boosts Space Tourism Race

On July 11, 2021, we witnessed the start of a new beginning for space tourism 53 miles above our planet’s surface. Virgin Galactic’s V.S.S. Unity, launched from a mothership nearly 9 miles above New Mexico’s desert, rocketed to new horizons and presented an entirely new experience. We could see the Earth’s curvature, all while escaping the bonds of gravity. This was the 22nd flight test for Virgin’s historic aircraft. However, it was also the only fourth crewed flight and the first with a full crew on board. The full crew consists of 6 members, 2 of whom are pilots and four mission specialists.

Beginning a historical start to the possibility of space tourism, the aircraft took off from Spaceport America at 3:45 PM UK Time. This came as a result of a 90-minute delay from the preplanned 2:00 PM UK time take-off due to bad weather conditions. Likewise,the test flight lasted for nearly an hour including a short period of weightlessness. Similarly, it reached a maximum speed of Mach 3, which means 3 times the speed of sound.

Experience of a Lifetime

Present on the space plane for this glorious event was Sir Richard Branson, the founder of Virgin and one of the leading figures in space tourism. Virgin Galactic was founded in 2004 with a vision of sending the common man to space. He described this event as a ‘once in a lifetime experience’. Furthermore, he announced the dawn of the new space age and how it was his dream since his childhood. Michael Colglazier, the CEO of Virgin Galactic, seconded Branson’s words considering this a landmark event for Virgin Galactic and the whole commercial space industry.

On the other hand, it was also a life-changing experience for other members of the crew. Sirisha Bandla, a 34-year-old aeronautics engineer of Indian origin, became the 66th woman in history to fly into space. She said she was taken aback by the view. Similarly, Beth Moses, who is also the 63rd woman in history to fly into space, told that the stillness and peace took her breath away. Furthermore, Bandla also considered this event as the beginning of a new era, where a lot of underrepresented groups, like women and people of colour, would be crossing the barriers of space.

For the viewers here on Earth, the company presented a live stream featuring host Stephen Colbert. According to the company, the event was viewed in more than 65 countries. However, glitches and delays also brought in some frustrations. People were quick to take to Twitter criticizing their preparations for broadcast. Due to technical problems, the takeoff could not be shown in the live stream.

Space Tourism Takes Off With Virgin Galactic’s Milestone Flight

Ticket Sales Reopens

Looking to start early in the exciting field of space tourism, Virgin Galactic has reopened ticket sales after the success of the Unity 22 test flight. The price of the ticket is 450,000 US dollars a seat. This is a sharp increase from the 250,000 US dollars paid by the first 600 customers but Virgin Galactic stopped ticket sales in 2018 t. For now, they will offer multiple options for commercial flyers, which include a single-seat, multiple seats, or all four seats. Similarly, they also sell seats for research and astronaut training purposes. This will cost about 600,000 US dollars apiece. Some of the ticket buyers are some familiar names in the space tourism industry. Elon Musk has already paid a 10,000 US dollars deposit for a ticket.

The Competition’s Just Next Door

Although Virgin Galactic’s successful test flight led to an astounding 600 ticket buys, it does not sail alone in the space tourism industry. Branson’s billionaire friends, Jeff Bezos and Elon Musk, already have plans to send the common man into space. Blue Origin, owned by Bezos, has already flown him to the edge of space, 62 miles above Earth, in its New Shepard rocket. Accompanying him was his brother Mark, Oliver Daemen, an 18-year old student, and Wally Funk, an 82-year-old legendary aviator. New Shepard is a rocket with a capsule while the VSS Unity is a spaceplane that launches from a mothership. Blue Origin can cross over the Karman line, the most widely accepted boundary between earth and space, 100 km above mean sea level. Likewise, it boasts of having the largest windows in space for a better view. Furthermore, Blue Origin also points out that its rocket has a better performance on environmental impacts.

On the other hand, SpaceX already has a glowing record of sending humans to space. By beating aerospace titan Boeing to launch American astronauts to the International Space Station, it presents itself as a strong competitor in space tourism. Unlike Blue Origin and Virgin Galactic, SpaceX’s tour will go to even further heights and may well last for several days. Similarly, SpaceX has already a deal in place with Axiom Space to send private crews to the International Space Station. They will receive astronaut training from both NASA and SpaceX.

Space Tourism Takes Off With Virgin Galactic’s Milestone Flight

How Did We Get Here?

Even though new options are popping up for commercial space tourism, our venturing into space has a history of only six decades. On April 12th, 1961, Yuri Gagarin became the first man to reach space. As of July 2021, only 574 people from 41 countries have gone to space according to the FAI criterion.

The early human spaceflight came in the decade of the ’60s following the successful launch of the Sputnik 1 in 1957. After Yuri’s historic venture, Alan Shephard became the first US citizen in space. In July 1969, we made a giant leap when Apollo 11 took humans to the moon for the first time. During the ‘70s, the concept of space tourism was already put in place even though there were failures to deliver. Similarly, during the ‘80s, the Space Shuttle program commenced. Over the course of 30 years from 1981 to 2011, it supported 135 missions sending 355 people to space. The Challenger disaster came as a great tragedy during this period and halted the program for a couple of years. Furthermore, during the  ‘90s, spaceflight was business as usual with the US and Russia leading the race and China starting to make movements.

The turn of the century was a turning point for space tourism. For the first time, Dennis Tito became the first private citizen to board the International Space Station. In the years that followed, wealthy citizens made frequent visits to the place that is out of reach for most of us. The leading companies that we see today were established during this period (Blue Origin in 2000, SpaceX in 2002, and Virgin Galactic in 2004). Over the period of nearly two decades, we have come a long way. There have been a lot of setbacks, failures, and fatal incidents. Finally, we are beginning to get what we were promised.

Know What’s Happening in the  Business World with Top World Business

In this blog, we came across the news of Virgin Galactic’s milestone edge of space flight. Likewise, we studied how this will democratize space tourism for people who would otherwise have been underrepresented in the industry. Similarly, we looked at the strong ticket sales that came as a result of the successful test flight. Furthermore, we analyzed the competition in the industry and offerings of various companies. Finally, we closed out with a brief history of human spaceflight and space tourism.

Top World Business is a one-stop place for all the business-related news from every corner of the globe. Our aim is to keep you updated on recent and future business news and trends so you can use them to your advantage. Contact us if you have any further queries.